Structure and Prospects for the Transformation of Official Development Assistance to Armenia

Abstract

This article examines the ratio of the official development assistance (ODA) structure of Armenia to its domestic goals. For this, the author examines the structure of development assistance to Armenia and the motives of its main donors. Considering the countryʼs rather close economic cooperation with Russia and the countries of the European Union (EU), the expected political motivation of the countryʼs donors in providing and distributing ODA is revealed. However, for the most part, ODA-supported projects correspond to the real distribution of the countryʼs domestic needs: poverty reduction and support for socially vulnerable groups of the population, development of agriculture and the service sector, and support for climate initiatives. The main contribution to this is made by international organizations and the United States, which are historically the most reliable and long-standing donors of ODA to the country. The Russian Federation is also a major donor of ODA to Armenia; however, due to the peculiarities of defining development assistance at the legislative level, Russian bilateral ODA is disordered and incorrectly reflected in official statistics. In the medium term, the current structure of ODA by sector and donor can be expected to stay stable: it is based on long-term agreements on cross-country economic cooperation and the activity of a stable political structure in the United States. In the long term, the structure of Armeniaʼs ODA is likely to be most determined by the development of economic relations between the Republic of Armenia and the European Union.